BOI approves Cargill Joy’s P2.08 B inclusive business project

The Philippine Board of Investments (BOI) recently gave approval for Cargill Joy Poultry Meat Production Incorporated to upgrade the status of its Php2.08 billion marinated cut chicken production project from non-pioneer to an inclusive business model. The firm’s project, which started operations in November 2017 with a production target of 79,465 metric tons per year (MTPY), qualified in the agency’s Investment Priorities Plan (IPP) criteria for Inclusive Business Models.

“Cargill Joy has the potential to create inclusive impact in Batangas by engaging the low-income farmers through sourcing of goods and services,” Trade Undersecretary and BOI Managing Head Ceferino Rodolfo said.

IB projects engage members of the low-income community in the company’s core operations, enabling their contributions to make an impact on the firm’s financial performance. These people may be employed directly by the firm, and/or their produced goods and services are integrated in the company’s value chain.

Under the current IPP, an IB-approved project can avail of income tax holiday for a total of five years. The criteria for IB models mandate that at least 25 percent of total costs of goods sold should be derived from micro and small enterprises (MSE), and a minimum of 300 individuals from the marginalized sectors are engaged, at least 30 percent of which are women. Income derived from such engagement should be equal to at least minimum wage, or baseline income plus 20 percent increase, whichever is higher, by the end of the third year of operation.

As part of the IB criteria, firms are also required to provide technical assistance and capacity-building measures to MSEs and individuals engaged, facilitate financing access, and/or provide inputs or technology that can increase productivity and improve product quality.

Cargill Joy projects that the total cost of goods sold will reach Php5.9 billion by year three, around Php1.54 billion of which will be sourced from MSEs. The company has an agriculture team which works closely and provides technical support to the MSEs which they consider as partner-growers. Company veterinarians guide the MSEs on how to further improve the growing process of chickens. In addition, the company partners with other firms in the provision of technical assistance for poultry operation, such as seminars on ventilation systems, disinfection tools and audits and weather specific management. The company, which is instrumental in providing day-old chicks, custom mixed feeds and vaccines to its partner-growers, will also provide direct assistance to enable these partner-growers to avail of capital expense loans from banks.

Undersecretary Rodolfo added that while firms only in the tourism and agribusiness industries may qualify for IB incentives in the IPP at the moment, it is encouraged that firms from other sectors also develop their own IB models.

“We look forward in seeing more IB partnerships in the private sector as we work towards multi-sectoral collaboration for a balanced economy where shared prosperity is enjoyed,” he said.♦